Qualifying for Medicaid

There are specific requirements necessary to qualify for medicaid. These standards deal with the assets a person has and their income. In 2013, the maximum amount of “non-exempt property” a person applying for medicaid could have was $14,550. (This was the standard in New York State.) In addition, there are assets that are considered exempt when applying for medicaid. If an individual owns a home, and said individual or the individual’s spouse live in the premises as their primary residence, their house is exempt from being considered with their medicaid application.

Transferring Assets

Assets can be gifted to friends or family members. In addition, life estates can be set up giving the senior the ability to live in the house during the course of their lifetime while title is transferred to children. Another method of divesting oneself of assets is through the use of an irrevocable medicaid planning trust. A trust is an entity with a tax id number. The parent transfers the assets to the trust. The trust is a testamentary vehicle which has its own inheritance scheme in it. It is also necessary to do a pour over will to work with the medicaid planning trust.

Five Year Look Back Period

There is a five year look back period if you are applying for medicaid coverage for a nursing home. If you give your property via a gift, life estate, or medicaid planning trust, this five year look back period still applies to qualify for nursing home medicaid. Due to the fact there is a five year look back period, it is important to do medicaid planning in advance to prevent being assessed a penalty for going into a nursing home during the five year look back period.

The five year look back period only applies to medicaid coverage for nursing home stays. It does not apply to community medicaid. Community medicaid refers to an individual remaining in their home and a home health care aide assisting them. This means an individual may transfer assets and, virtually the next day, apply for medicaid community benefits.

Conclusion

Individuals and families, as they get older, may face the unwelcome prospect of ending up in a nursing home at some point in time. Nursing homes cost about $10,000 to $12,000 per month. This would impoverish most families.

If you have a reasonable plan to protect your assets in the event a nursing home stay is required, you may be able to qualify for medicaid and have government benefits pay for all of your expenses.

Elliot S. Schlissel is a member of the National Academy of Elder Law Attorneys who assists clients with regard to medicaid planning issues.

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